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tv   Squawk Box  CNBC  March 3, 2010 6:00am-9:00am EST

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the cover on the journal today where they let their spending get out of hand -- >> no. my point is, if you look at some of their structures, they have let those fall into disrepair for years and years and years. not only do they not just fit the roofs, but a lot of those structures, they don't have roofs. it's been close to 2000 years. >> so they can put off spending a little longer? >> i'm not sure what caused it. but they have let a lot of things fall in disreair. a lot of that is in ruins over there. it is! they need some new buildings. >> meantime, the senate is ending a week-long standoff, voting 78 to 19 to approve this temporary extension of jon jobless benefits and highway money. the president is expected to quickly sign the measure. the programs expired on sunday. as you probably know by now, republican senator jim bunning would prevent the senate from
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renewing them. an agreement late yesterday let bunning propose a tax measure to cover the bill's $10 billion price tag. the democrats use budget rules to prevent it from coming up for a vote. bunning has been all over the news, not only the video of him going into the senate elevator being held up by jonathan carl. >> would you do that? >> i think when you put your hand in there and keep it from closing, this is crossing the line. it's a senator's elevator. he's right. >> it reminds me of the paparazzi. like the means justify the end. i will do anything to have -- you know, it's a senate elevator. here is a senator. and bunning, we've had him on. he's a colorful character. >> yes. >> but to keep putting your hand in the elevator and not letting it -- you saw the look on his face. he's like, you're kidding me, right? >> "the washington post" said after his long career in the senate, that he's down to one -- i was a baseball player, former
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player, said he's down to one last pitch and that's a screwball. there's also the scuttlebutt that maybe if the tea party gets their stuff together, maybe they could use him as a write-in. >> the amazing thing is that one senator could hold this up. in large part, that's because of the leadership in the democratic party. they shouldn't have let it go on to long. one senator versus 99, that's -- >> we'll talk to jon corzine, our guest host, about life in the senate and whether this resembles anything that he ever worked with three years ago. >> i didn't see palin on leno last night. speaking of tea parties and conservative icons, i could tell you that i did -- i said this yesterday. leno, i watch that. maybe i belong in the middle of the country. >> you stayed up that late? >> no. i tivo'ed it.
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lindsey vonn is about 12 feet tall and jamie foxxis great. >> he crushed letterman in the ratings. >> wouldn't that be unbelievable? seven months is not very long. you have to admit, it's like -- >> it's not very long, but man, picking it up again? that's a daunting task. >> it's like one of your vacations, really. >> i just came back. >> i know. a number of notable economic releases on today's calendar, weekly modifications kicking off at 7:00 eastern. challenger, gray and christmas reports on job cuts. and then the adp reports, the employment report which, you know, like it, call it right, call it wrong, it's had a history. i don't know. i respect it more now.
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i wait for it. and you can always explain why it might be different or why it might not exactly predict friday. >> there are some people who say these are better numbers than the labor department numbers. the labor department may have in kinks in the wheels. >> if you look closely at the member by minute, which we do with our ratings, you can see people that are in this business are waiting for that. it's a really, really important report that people watch. that's at 8:15 eastern. private jobs are predicted to have lost 50,000. and i guess we're still looking for a jump in the rate, right? >> i think 50 was an earlier estimate i saw this week for friday's number to the down side. 99 maybe, right? >> snow is going to mess things up for a while. it's flying across the country, flooits flying back.
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>> you were able to look down and -- >> yes, and everything is white. >> you weren't reading? >> i was. i studied "time" magazine. >> your talking points are there in time every week. >> no. it was actually really, really interesting. >> no, i couldn't. >> you might. they talked a lot about dick armey and his party and what they've been involved in. and the lead that they had in one of their stories was rick santelli is the beginning of the tea party movement. >> how about if i tarred him and sent him out of the country? >> no. it was talking about the tea party jennings. >> the cover of "news dd week" this week is how there may be finally democracy brewing in iraq. they have a picture of mission accomplished, saying that that may finally be coming to pass. that is what the president at the time was trying to fight for. >> well, bush is gone.
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anyway, at 10:00 eastern, we have if nonmanufacturing ism numbers and the weekly inventories at 10:30. if that's not enough to keep you occupied, don't miss the fed's page book at 2:00 this afternoon. we prefer things that happen on our show, but if you want -- >> we'll talk about it tomorrow, how about that? quick check on the markets this morning, the dow eked out a gain yet yesterday. that is industry straight sessions to the upside. people are looking to make a big bet ahead of the jobs number on friday. a lot of things are really close to the flat line. oil is still below 80. got mixed inventory numbers yet. the yield is up 3.617. the dollar is losing a little bit of ground. the euro is getting a little back on optimism about this. also the yen, which we were at close to the lowest levels
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against the end in about two months, and then with the dollar relatively weak, gold this morning might be getting back some gains today, as well. it's basically flat, 1137, but that's higher than we've seen in recent weeks. i want to get overseas, christine tan is in singapore and first to london where we'll check in with anna edwards. everybody is watching to see how seriously the markets take this greek plan. >> absolutely, carl, yes. the greek story is very much front and center for these markets. it's all sketchy, but it looks as if we're going to get another 4 billion or 5 billion euros worth of austerity measures or savings from the greek ministry of finance. in terms of other stories we're watching here, we're looking ahead to that jobs number on friday. we got a little clue here in europe about that. adecco, a temporary staffing agency in europe, but it obviously doesn't business worldwide, they're talking about their u.s. performance and thag
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their business there returned to growth and so that can be a positive clue going forward. we were also following numbers out of adidas, the sports wear manufacturing giving us numbers that really disappointed the numbers. the stock was down by as much as 5% earlier on in the trade. they're expecting that emerging market sales and the world cup, which i know you know is only 99 days now in south africa will help boost their performance. that's the european picture. now to christine tan in singapore. >> hey, anna. thanks for that. investors are harboring hopes of a bailout package for greece. tray was lackluster because of a key jobs report on friday. the yen's rise in the dollar weighed on the exporters. toyota again in focus, with shares gaining more than 3% today after reporting u.s. sales fell less than expected. other story we're watching is fourth quarter gdp growing at its fastest pace in almost two years. this affirms the rba's decision yesterday to hike rates by 25
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basis points. that data helped to boost sentiment in the equity markets, up 0.7%, strong commodity prices overnight helped to lift the miners there. and i want to mention hong kong, the hang seng losing ground again around 1% in earnings. the bank reported earnings in line with expectations, strong growth in asia helped to offset bad debt in the middle east. finalry, in shanghai, the composites rose 0.8%. the annual parliamentary meeting kicks off today. lots of talk about what kind of policy support could come out of that meeting with green energy being seen as a hot topic. that's all from asia. >> for more with what is moving the markets in the day ahead, we're going to join us task for nous. with us now is leo grahowski. also chief economist michael dard ya.
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you're talking about volume dropping off, what is going on? what has people concerned at this point? snl new mexico friday morning, not a lot of being economic moving news. i think yesterday's market was good until the end of the day, but it was trading off the prior day's news. so there's just not a lot of market-moving news on the horizon. >> mike, also, we've been watching the economy and the economy does not look as optimistic as it had, at least the recent readings we've been getting from different places. is it your sense that this is potentially the beginning of a second leg down or is this the normal ebb and flow that you see as you start to have an economic recovery? >> i'm in the camp that this is the normal ebb and flow. we had some volatility in the data last week with a few disappointing reports. but importantly, you know, the credit market still looked good to me. that's always my fallback point,
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if you start to see confusing data. and the fact of the matter is, whether it's the greece fears or the situation in china and, you know, folks worried about a deep slowdown or a hard landing there, you know, really, we have not seen any deterioration in these money market liquidity spreads, which i call proxies for systemic risks, those are not budgeted. very steep yield curve in place. so i still think that this economy is going to come back and we're going to have a year where we're probably close to 4% at an average, maybe a bit closer to 4% in the first half than the second. but i think we're getting very, very close to a turn in the labor market here. it may not be revealed in the february data with the two big storms in the reporting period. but all the leading indicators for employment growth have turned. and even with this, you know, recent back up in jobless claims, first time claims are still down 25% year over year. that's a huge move and it's always in the past been
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associated with a recovery in employment. and you can go down the line, temporary hiring has picked up. hours worked are picking up. that's why we had a good bump up in wage and salary growth in the report that we got monday for personal income and spending. so, you know, let's not throw in the towel just yet. >> although if you're looking at the first half having strong numbers, jpmorgan just cut its numbers from the fist quarter went from 2.5% to 3%. >> well, the first quarter is going to be slower than the fourth. that doesn't mean there will be a big iraqi to it. you've got a big inventory push for the q4 numbers. but if we see better consumption data, which is that those january figures on consumption came in above expectations and the first quarter is going to be measured off of an average, vis-a-vis the fourth quarter of last year, so consumption looks likes it's going to be faster in
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q1 than q4 of last year. even if the overall headline number on gdp is a bit less, you know, the reaction to it may not be negative. and i still think we're going to be pretty close to 4% for a full year if we average out all of the quarters for real gdp. and with the labor market come back imminently, like within the next few months, that should allay some fears about this expansion being sustainable. >> leo, you mentioned that traders are waiting for that jobs number on friday. what about the adp number today? >> gis a clue as to how bad the weather might impact the numbers. and i guess the only good news, really, for the market is in advance of friday the numbers probably aren't going to be good. you can see an uptick in the up employment rate, loss of jobs. is that the expectation building in is that we may have 100,000 jobs lost, but it may be attributed in part doo due to
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the weather. with what he said around spreads on the bond market, the market has repriced risk. we find the u.s. equity market reasonably valued in here and $80 in earnings in a 15 multiple, we're carrying a target on s&p by year-end. is it fair to say that some of the financials may not perform as well as expected in the first quarter? dick bove cut his earnings estimate for goldman sachs for the quarter because he said with volatility drying up and with trading volumes down so significantly, that that could have an impact? >> we're preferring what we call a bar bell approach. so we've got an overweight in technology, in energy. but i think it's important that investors do have that in the portfolio.
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i think we have to be careful in the health care sector. but we are carrying a modest overweight in the health care sector. >> leo, thank you for coming in today. mike, it's good to talk to you, as well. >> thanks a lot. when we come back, we will go overseas for a live report in athens and madrid. two countries, one common theme. first, though, as we go to break, a look at yesterday's winners and losers.
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welcome back. equity futures this morning in a pretty tight range ahead of adp and challenger numbers later on this morning. costco did report results earlier today. the retailer missing the street by 5 cents. quarterly revenue was slightly better than expected. the company says results were helped by more shoppers coming into its stores. february same-store sales rising a better than expected 9% over the cost. reuters is errored aig may
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follow the lead. aig may convert existing treasury preferred shares to common stock, allowing them to be sold in the market over time. let's get your national weather forecast this morning. scott williams is over at the weather channel watching the weather for us. >> good morning there. this certainly isn't what you want to see once again in the mid atlantic and the northeast. now, with this storm system, the track is very important. it will be offshore more than the previous storm, so that will mean minor snowfall accumulating for places like philadelphia, eventually into boston. but check out norfolk, virginia, with temperatures are falling and heavy snow is reported right now. we'll find some problems there earlier this morning. but this area of lep continue to lift out to sea when certainly some of the impacts will be the rain and know mixing in the
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atlantic. wendy concerns as we move along coastal sections. expect some delays. call ahead, philadelphia, new york city and the boston area. but certainly a lot of folks are sick and tired of the snow. look at the surplus, new york city, a surplus of 32 inches of snow. also a surplus around atlantic city, new jersey. back to you. >> okay, scott, thanks. we've got a debt threat sweeping the globe. two reports this morning, steve sedgwick is in madrid, spain, but we begin in athens where guy johnson is there listening to comments coming out of the greek cabinet today. we had a big delay yesterday, guys, so i'm going to toss it to you and say good day. >> hey, joe, yeah, there's a lot happening here. is it a good day for greece? we'll have to wait and see how the markets are reacting. we see greek expends coming in over german bonds a little bit. the euro is a little stronger this morning after the
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announcement of a third austerity package val valued at around 4.8 billion euros. we're going to see a rise in v.a.t. and it is likely we'll see pensions being frozen. some trents that have come through in the green government are largely seeing the real economy. we've seen comments overnight indicating that the economy would like to see greece borrow at similar levels compared to the receipt of the euro zone. we heard in the cabinet meeting this morning that if we don't get the kind of reaction, we might go to the imf, pressure b the rest of the euro zone to help greece before it has to go to the bond market. we're watching the market
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reaction very, very carefully. they're watching very closely what you have hire in spain. spain is the really big problem. let's get details on that from steve. >> yeah, guy, thank you very much, indeed. the reason why people are so concerned about this is because spain is right in the periphery of the european project. it is the fourth largest economy in the euro zone. 1.6 trillion dollars. it is twice the size of greece, portugal and ireland put together. they have some yellow republicans and they had ee nrmus labor market issue, including a 19% unemployment rate. greece has a $4.8 billion austerity program, spain has a 50 billion one. how do you enact austerity amid
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a bear recession? that is something at that time of people have been addressing because there are concerns that the spanish government isn't attacking some of those real problems and the social programs are not being touched. the labor market i've seen is archaic here. you get 45 days severance pait pay for every company you've worked. if you've worked 500 da huyears 200 days severance. that includes a construction and spending boom, which is enormous. what is the public debt issue? it seems okay. it's around had a of the gdp we have in dprooes. but once you add in private debt, as well, the figure becomes 342% of xgdp. so a real concerned that people
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are in recession. it's almost twel 2% and 275% growths to start creating more jobs. and having an austerity program, it's going to be tough to enact. this country, as well, has to raise over 100 billion euros in this market. about we rurp, he'll sw more on this morning's top story.
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good morning and welcome back to "squawk box" here on cnbc. i think it has finally morph'ed into a "squawk box" by now. it takes time to start. i'm joe kernen along with becky quick and carl quintanilla opinion two major employment reports coming. let's get right to the futures pits. jessica hoversen with mf global, a lot of snow. but that means no matter how bad it is, jessica, we can say it's the snow. that might be a good thing. >> yeah. it's really good to blame it on the weather. i think that that will play a very important role, however, in determining the labor data for this round of data. i think the economists will be very sympathetic to it when analyzing the data and then i think the real sort of analysis over jobs and how it's actually
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impacting the economy and the trajectory of labor improvement will be pushed forward to the march numbers because of the snow. >> what's really happening, do you think, or what would be happening if global warming was real, what would be happening? >> maybe we would be having a party with the polar bears. >> no, but if the snow hadn't been a problem, would be we adding jobs inspect what's the real back drop? are companies just too cautious at this point to do what they normally do at this stage of a recovery? >> i do believe that the labor outlook is still marginally grim. i think that if you look at the -- some of the leading indicators, the conference data suggests that i would say hiring activity is anemic. the american staffing agency, their weekly report didn't show any sort of superior growth. we did, however, see an expansion in the ism manufacturing employment index, but i'm hesitant to say that that is reflective of really
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robust employment expansion due to the fact that the manufacturing sector is a small part of the economy. today, ism manufacturing number will be important. that index is still below the 50 mark. the limits are around 44 right now. if we could see it around 47 or 48, then he will see some optimism in the market. >> it's harder to determine a lot of the cause on these things. we have borrowers didn't do much with refinancing. we don't know whether they didn't want to or whether they couldn't. and then we also hear that employers are not hiring and one side says it's because of all the uncertainty coming out of washington, they're afraid to do anything because they can't make plans, they're don't know what that has to do with health care or taxes. the other side says they would hire if there was demand. if the recovery was that clear, they would be hiring to meet demands. do you have a feeling on either one? are people just not refinancing
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or are the banks still holding on to every penny they have? >> well, i think it's a combination of those two factors you just mentioned. number one, global aggregate demand is definitely in question. we're still in the early stages of this recovery and i'm not sure if firms are very confident for the outlook in demand. secondly, policy does look to be ambitious. we have the extension of the jobless bill passed through a and -- well, he couldn't step down .let that happen until they let the elevator shut. >> thank you, jonathan carl. >> thank you, jonathan carl. 100,000 people get the benefit. sorry. keep going. >> regardless, i do think that there is going to be major head winds in getting more policy passed through washington because there is a great concern over the deficit. and i believe that obviously the sovereign debt, the looming possibility of a global sovereign debt crisis is going
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to make increasing deficits even more difficult. so -- and that just exacerbates the uncertainty for employers that are looking to possibly expand their labor forces. >> jessica, david leanhart who writes about the economy for the times, big piece in this morning's paper, basically looking at the data over the last couple of weeks, home sales, stocks have peaked, home sales were durable. and wondering whether or not we are at that stage where we knew inventory building would come to an end, we knew we would have to pass the ba to be to real final consumer demand and that maybe that baton is getting dropped and we are in the process of seeing that happen. is that the common view where you are? >> i believe that we are definitely in an inflexion point in the economy. but the greater macro threats remain so ambiguous, that i'm not sure that -- that inflex point will be quite a large curve to determine where we go.
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we have large questions over commercial real estate. i would say the outlook for employment is ambiguous as we talked about earlier. and on the global scale, we're still looking at this sovereign crisis. also there's -- japan as a huge debt to gdp ratio. the uk is facing similar issues. on top of all of that, i think there's a great concern on what is the growth trajectory in china. they have these legislative meetings coming up in the next two days and i think there is a concern that the chinese will opt to reallocation stim use husband more domestically as opposed to investing in infrastructure projects, which has a potent effect on the global recovery. and that all things considered, i think that that would start to help -- i'm sorry, if the chinese do reallocate stimulus, i think that's going to cause investors to reprice the global recovery. >> okay. well, i mean, if there's an answer out there somewhere and it's awfully close but it's not
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coming nearly quickly enough when it comes to the real consumer health in this company. jessica, thanks. >> thank you so much. a busy day in washington, as well. we have an extension of jobless benefits, a debate about football rel regulation. john harwood is covering it all for you this morning. >> good morning, carl. >> the president is going to talk about health care and what ideas might be incorporated. but between that, the bunning news and health care, what is most important to you today? >> i think health care is important. what you're seeing in this senator remarks he's going to make is the continuing effort of democrats to get back up on their feet after the massachusetts election and try to pass the president's priority of comprehensive reform. as you mentioned, carl, he put out this letter yesterday saying he was going to try to accommodate republicans on four areas. that is really a message not about moving substantially in
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the republicans' direction. these are gestures to try to appear reasonable and to get conservative democrats then to support his bill. it's not really about getting republican votes because we know where they are. they're trying to stop this inge thing. >> right. >> the democrats are trying to pass it and the question is can they get the votes. >> the journal says this morning that there are six house democrats who voted not the first time, who are now undecided. what would -- what is bringing them around? what do they like more about this version than the last version? >> well, a lot of people, carl, who voted against the house bill is in the first instance, those democrats, those conservative democrats voted on cost grounds. that bill coveted out at more than $1 trillion. this bill is somewhat smaller, the senate bill is somewhat more modest in scope than the house bill. and so the idea or the argument is to go to some of those blue dogs and say, this is, in fact, more physically responsible and so you can support it.
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that is part of the argument. the other part of the argument is this is really, really important for the team and you need to support your team. >> yeah. they like the senate bill better before the president even started to -- >> yes. >> and i like the way you said it, john, to try to appear to be more -- to bring in some of those -- that's pretty blunt and i think that's probably true. but it's been interesting to watch. you do the summit. >> joe, it's like the summit last week. the summit was not about getting republican votes. this is mostly an attempt to win public opinion and get people to say, oh, well, that was a civil conversation they had. it looked like the president was listening. i like this process a little better than the back room deals than i was hearing about before. >> and he gave the republicans a chance to look bad. i mean, i don't think -- senator bunning, whatever he's thinking, if there had been someone at that health occasion debate that came across like that, it could have been a win. it didn't happen and the republicans didn't look like a
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bunch of wackos at the summit. they handled themselves okay. but you might as well give them a shot, right? i mean, you never know. >> does bunning look like a wacko, john? >> yes. >> how does this all play out in kentucky? >> look, he's retiring. he doesn't get along with mitch mcconnell, the republican leader in the state. you saw yesterday bunning read a letter criticizing mcconnell. that's about as direct a shot between senators of the same party as i've ever heard. jim bunning does have a point on principle. that is to say everybody in congress says they want to pay for things, but then when it comes down to things that are popular, whether it's the iraq war, if you're president obama, or unemployment benefits right now with the democrats in charge, they typically call it an emergency and don't pay for it. so he has a point on principle. the problem for him and for republicans is that asserting
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this particular point at this moment literally delays checks for people right now and that creates a lot of heat on members of your own party. that's why susan collins went on the floor yesterday and tried to get him to come off of it. in the end, they cut a deal and mitch mcconnell is counting the minutes until jim bunning goes back to kentucky and he gets a new senator, whether it's a democrat or republican. >> you do know some people who are receiving jobless benefits, i think it's up to 99 weeks that some people are getting benefits. isn't he raising the point that at some point we have to take the training wheels off, whether this brings hardship to people or not on, right? >> yes. but i think his more important point is paying for the spending in respect is an argument that says unemployment benefits, especially, for a long period of time are deterrents to people finding work. that is a respectable
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philosophic argument. most people don't -- because of the way if unemployment system has evolved in our country, most republicans aren't responsible making that argument. but bunning was emphasizing a different point which is we have to pay for this spending and not just borrow it from the chinese. and a lot of people share that sentiment. they're just not willing to take it to the level that bunning did and finally they got him shut down by promising him some votes on amendments. >> finally, i have to ask you about texas. kay bailey hutch ctchutchison l perry. is this a nail in the incumbent coffin? >> it turned out that kay bailey hutchison picked exactly the wrong year to challenge rick
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perry given what's going on within the conservative moment and the conservative parliament. you know, when you're challenging an incumbent, you have to have a lot of things go right. in fact, she had a lot of things go precisely wrong in terms of the broader political environment. incumbents of both parties in washington know it's going to be a tough year, but make no mistake, it's going to be tougher for the democrats than for the republicans. >> you heard the term texas democrat. we know what that is. the same goes for texas republican. >> here is the test of the issue, joe. bill white, a fairly effective democratic candidate, who is nominated against perry, what are his chances of beating rick perry who is the incumbent in texas this year? i would think that that would be a very, very uphill fight for the democrats, but we'll see. >> if you say secession down
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there, not everyone thinks that you're out of your minds. >> thinking out of the box. >> that was the talk last night after white won the democratic nomination. white to perry. >> don't mess with texas, i'm telling you. you don't want to do it. >> you heard what barney frank said about the senate proposal. bad joke. >> right. that's where you get to some of the limits of the bipartisan conversation that's going on between dodd and corker and dodd and shelby to try to cut a deal. trying to trying to be responsive. i'll trying to come mize on the agency goal. and so he's been seriously trying out republican ideas for what to do about that. he put it in treasury, do you put it nfdic, do you put it in
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the fed, which is corker's suggestion? what he's finding is that if you go in a certain correction, like the fed, for example, many democrats think that the fed has a well proven track record as a weak regulator, it's not appropriate there, and our friend, tony fratto, former bush treasury and white house official yesterday said not appropriate. so that's why chuck schumer came out and barney frank came out yesterday. i think liberal democrats believe that they can win this argument if it's really elevated. and so, you know, air anna huffington, paul kriggman in the financial sometimes is saying let's fine a bad issue in the business. on financial regulations, they don't see it quite the same way. >> we've got to go, but could they put a public option in,
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john, for -- >> no, because they couldn't get the votes for it. >> they couldn't even get 5? no. i don't believe they could. and i don't believe they could get the majority in the house, either. one of the reasons you might pick up a vote or two in the house is that the public hospitalization, which was in the how house bill, is not in the senate bill. >> no, but the house would pass the senate bill. then you have to do the reconciliation at that point until the senate for a majority, right? >> yeah, but you still have to get majority in both for that bill and i don't think you can do that. >> because, you see, clinton wanted to use reconciliation back with hillary care and -- >> the anthony weaner caucus, isn't that the press conference, put a camera on me caucus? >> take your pick. exactly. john, thanks. we'll see what happens later on. we will talk to howard dean about that issue this morning. >> i'll have to get him to yet
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yell. he's a convicter for us, isn't he? we own him. >> we own him, we're going to -- >> can you do that thing is in can you do that thing from 2004? >> yeah, i'm going to ask that -- because remember, did cramer have a -- oh, no, we did. we had it on a button. >> do we still have it? >> we got rid of it. >> are you sure? john lefont. do you have it? i'd love to hear it. >> all right. if you have any comments or questions about anything you've seen here on squawk this morning, e-mail us, when we come back, we'll get to the news making headlines both inside and outside the world of business. xxxxxxxxxxxxxx
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welcome back, everyone. right annoy, it's time for a check on the news outside the world of business. for that, we get over to alex witt. she has a roundup of the headlines. good morning, alex opinion. >> good morning to you, becky. with the elections three days away in iraq, three deadly
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bombings have killed at least 30 people. at least 48 people have been injured in the deadliest blast to hit iraq in weeks. a landmark case before the supreme court, yesterday the supreme court agreed to hear a challenge to the handgun prepar that ban extending gun rights nationwide. and more troubles for naomi campbell. a driver for the supermodel who has earned a reputation for her hot temper says she assaulted him while he was chauffeuring her around new york. she reportedly took off and is wanted for questioning, though no arrest, however, is expected. that chick has got to chill out. i'm just saying. >> we were talking about her earlier. >> yeah. >> what's the headline on "the post"? "driving miss crazy"? >> who hits the driver while he's driving, right? >> they put out that long list of everybody she's supposedly or reportedly tangled with. >> carl, you might be right. >> the housekeeper, maid.
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>> when is the last time any of us would have said the two words naomi campbell if she hadn't done any of that stuff, alex? >> the last time she wound up cleaning toilets. >> i know. she's still got escorted by the police and v.i.p. you either hire ken sunshine for $8,000 a month or you hit someone with a cell phone. >> see, that's sad. i mean, she was a big megastar. that's sad if she's really going to that depth, don't you think? >> she's on the cover of both papers. >> here's what i'm going to do. >> okay. >> good idea. good idea. >> think about it. you could be a lot more famous. just hit wildfire your producers. >> again. >> oh! oh, you're going to do it. that's right. let's do it. beats $8,000 a month. pfizer and a partner betting on a new drug. key data today. the blockbuster details next. if i had to sit on the bench due to diabetes...
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it would frustrate me. my bayer meter is very important. (announcer) only bayer's contour meter has programmable personal high low settings. it allows me to make sure that my diabetes is controlled as tightly as possible. (announcer) the contour meter, only from bayer. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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welcome back, everyone. pfizer and its partner will release highly anticipated late-stage test results on their alzheimer's treatment this morning. this is potentially a big drug. medivation had a new high yesterday with lots of action. we'll have more later on. still to come this morning, more of the top stories of the day. plus from wall street to washington, we've got two power
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players on "squawk box" today. dallas fed president richard fisher and former goldman sachs ceo and new jersey governor jon corzine. stick around.
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the countdown is on to friday's big jobs report. ♪ the final countdown >> two key reports to set up the main event. the challenger jobs survey and the adp employment report both coming your way this morning. from politics to the private sector, former new jersey governor jon corzine shares his
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thoughts on everything from health care to financial regulation. greece's financial problems spreading into the streets. new measures being put into place by greek officials to help reverse a flow of red ink in the country's budget. official preparing for more strikes and is exposure to europe putting american banks at risk? "squawk box" begins right now. good wednesday morning. welcome to "squawk." i'm carl i did not nkn quintani. richard fisher's exclusive interview just ahead. 7:30 eastern, we officially kick off the jobs front countdown. we'll have the latest read on corporate layoffs. and then the private sector report out and discussing the future of the software giant
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s.a.p. greece announcing new spending cuts to rein in the bulging deficit. they include a freeze on public sector pensions this year. a 2% point tax hike. salary bonuses also being cut for public sector workers. more on this throughout europe later on. the president will unveil an updated health care package today. the white house says the president will urge congress to move swiftly towards a vote on legislation. the new plan contains gop-backed provisions on cutting health costs and preventing fraud bringing in ideas like health savings accounts and perhaps malpractice stuff as well. our guest cohost this morning is former new jersey governor jon corzine who is also the former ceo of goldman sachs. governor, thanks for joining us. >> good to be here. thanks for having me. >> we're lucky to have you here for two hours. but we've been trying to figure out what's been happening with the political scene this morning. i mean, this is an unbelievable turn of events that's taken place over many states over the
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last several months. you know this firsthand, but now we're looking at what happened in texas with kay bailey hutchinson. >> well, you have a very popular senator who in a primary lost by a pretty substantial margin and didn't have to go to a runoff. all those kinds of things really catches people by surprise. in the waning hours, maybe not, but it tells you that the fervor, the fire in the belly of those who want to express the conservative view is growing, not diminishing. and i think, actually, you're getting to see the awakening of some of that same fervor from the more progressive liberal side, the initiative of the lieutenant governor in arkansas, to get in and challenge a sitting senator, i think, says that people on both sides of the
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political equation are getting pretty frustrated with not much happening. >> we don't see any success from that side. >> no, we haven't. >> we don't know whether that's going to work. >> they've been asleep, though. >> yeah. i don't know. >> i can tell you. >> jon, someone donated money to the obama campaign for me. so i get -- >> he's not kidding. >> -- so i get stuff from david plouffe every day. i get stuff from john kerry. i get stuff every day. and they -- >> don't get on one of those lists. >> i'm on a rant. they've been ranting. >> i put on you that. >> you put me on that. thank you very much. i have you to thank. but one thing, jon, i was thinking about, the idea that we sometimes heard from the obama administration that it's an anti-incumbent fervor, not necessarily a conservative angle. that kind of -- this kind of goes against that thought because perry was the incumbent.
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>> probably, but you have to remember this is a republican primary and the kind of challenge that you saw -- the same kind of challenge you saw in new york 21 or 23. >> the age-old question that we keep talking about and everybody's talking about -- and david brooks, i got some publicity eight months ago when he said that the tail was wagging the dog. the tea party and the fox news, that they're outliers and that they're bad for the legitimate conservatives. they're too far -- the question is whether it really does represent the wing nuts or whether there's an entire move to the right by conventional republicans. >> what i think is you've got a very, very dissatisfied electorate. you're north of 25% of people unemployed, underemployed or out of the work force. everybody knows somebody that is struggling in the economy. there are a lot of things out of kilter. and people are just plain out and out unhappy.
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i see the front page of this -- >> she's mad. she's crazy. oh, you're talking about someone else. >> definitely disturbing the general electorate. but the reality is people are very, very frustrated with the inability of our democratic system. by the way, it is because we are a democratic system that there's lots of contrasts of views to get to conclusions on things that are really, really important in people's lives, particularly when it's tough. you know, you bite your lip when, you know, things are going well. you've got a job. your kids are going to school without a lot of problems and all those things happen. now that isn't happening. >> it's not just things getting done by the government. there's also a certain contingency -- massachusetts -- you can say -- >> i was going to say, perry's success came in part from haging hutchison as an earmark bringing money home which suddenly is a
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liability. bunning's making hay by putting jobless benefits at risk. >> massachusetts is a much better test of the big theory than what you see in texas. >> right. >> other than the fact that the motivation of those people who have that view about big government, have that view about failed government and broken government and all that, those folks really, really express themselves. and that's bad even for, you know, a pretty conservative senator. k. bailey hutchison. >> it's also too bad that you can say they already had health care, so they weren't concerned. you know, that's the excuse that your party can use that it really wasn't -- you know, they weren't saying anything about the national health care plan. they already had theirs. so that really wasn't was -- you know, it was a bad candidate up there. she was in hiding while he was out at all these different campaign rallies.
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we've got a lot of ways of explaining it away. but they were chanting 41. >> right. >> but 41 voted for romney care, right? >> right. exactly. >> a lot of cross currents. >> it gives everyone something so it doesn't settle anything. >> let's go back to what becky started this with. we have an incredibly, incredibly fluid, i think one of those years in the election cycle that are going to have major, major implications probably for a lot longer than even the presidential election. and it does, for a progressive, it is encouraging to see some movement on the enthusiasm level to the left of center which hasn't been there, i can tell you. >> but does that just mean more rancor, less bipartisanship? >> well, rancor as you get into the political season and the debates.
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you know, the fact is, you've got to have -- you've got totia sides to have the democratic outcome reflect people's interest. >> what do you think swept the president into office, though? that was only a year ago. you're saying that they were quiescent for a year? >> if he's not their friend, who is? >> but the progressive fervor was evident in the last election. >> there's no question. and it sort of -- you know, people -- the left is not particularly happy with our president. you know, they think he hasn't carried their agenda. you know, this whole public option issue. you'll hear that from governor dean later on or at least some variety of it. there's a lot of frustration. i know most people labeled me a liberal in new jersey. but most of the progressives thought i was too willing to compromise in the middle. and so you lost some of that
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enthusiasm of the people on the left. you check the polls in massachusetts and new jersey post-election. unions were 50/50 or even more towards the republican side, particularly the sort of building trades because those folks got a conservative bend in their stomach underneath. so that's trouble for progressives and democrats as we go forward. >> let's end on that note. >> nice. >> you can turn that fire. you can turn that fire. >> the governor is going to be with us for the rest of the program. we have much more to talk about. and we have some other special guests joining us as well. >> we do. it's been a big week for fed presidents. kansas city fed thomas hoenig with our steve liesman. that was yesterday. >> longer term i do worry about inflation. but what i really worry about is financial stability. you know, i've been referred to as inflation hog. i'd like to think of myself as a
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civility hog because when you have zero rates that go on indefinitely, you are inviting future problems, in my opinion. >> joining us now, dallas fed president richard fisher. good morning. it's great to see you. >> good morning. i want to wish you welcome one day after the texas independence day. we got independent 174 years ago from mexico. we celebrated it yesterday. and i think you saw some of that in what you were just discussing. >> we were. you know, i hesitate to say, richard, that, you know, that we made you here on "squawk." but you used to guest host all the time on "squawk box" before you got this new job. and you explained to me one time at length what a texas democrat was. and i was just using that. there's texas democrats, and then if you take a texas republican, you're talking a texas republican is out there, right? >> well, look, teddy roosevelt once said when people lose money, they strike out like a wounded snake at the first thing that comes into sight. i think a lot of this is just
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anti-incumbent fervor. washington is playing for so much. a lot of people have lost money. and that's my simple explanation. but i don't get involved in politics anymore. that's for good people like jon corzine. >> exactly. >> thanks, mr. president. >> exactly. >> thank you, governor. that's as much as we'll ask. now let's get on to what you do get involved in. there's so many -- i don't know where you want to start. i saw some of your comments earlier. about what type of recovery this is. it is a recovery. but it may not be one you'd classify as robust at this point. >> yeah. we have a significant problem, as jon corzine just mentioned, of unemployment. a lot of people that aren't even on the rolls now. they've rolled off. they're waiting to come back in. unemployment bumping against that 10% ceiling, too many people out of work. and until businesses feel confident about the future, they're not going to add to their payrolls. they're not going to expand their cap ex.
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and right now they're very, very cautious. we do have a business community in this country that has cut costs to the bone. i think it's extremely efficient. it's learned how to gear themselves off of everything that's available through the net and through globalization are waiting. but the thing they're waiting for is a better sense of direction before they have the confidence to invest, hire people and get back to work. >> we had that discuss earlier, too, about what exactly the corporations were telling us, whether it was uncertainty about everything coming out of washington. that's what you hear from -- everything is so divided along ideology lately. but is it because they're worried about health care, worried about higher taxes? or would they be hiring if there was demand? if it was there, they would hire. >> i think it's a little bit of both. they're not worried about the central bank, i'll tell you that. what they are worried about is what are their social overhead costs going to be? if you hire somebody, let's say you hire a truck deliver to deliver on a route that pays $80,000 a year.
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are they going to pay him that or what is the social overhead until they resolve that issue the health care, that is an issue. cap and trade is an issue. it's not ideology, per se. business demands to reduce uncertainty. that's how you conduct business. you'll never get rid of uncertainty entirely. >> there is some uncertainty, though, about the course of interest rates in six months out range as normalization comes back to monetary policy, and people have to figure out -- well, you guys are going to make a decision someday to go off of zero short-term rates so that's going to have implication. and that is an uncertainty. >> that is an important point. and you use the word "normalization." i think the important thing for your viewers is the federal reserve said it was going to do something about liquidity measures. we took enormous risk, put in place asset-backed securities to assist so that we wouldn't break the buck in the mutual money market, mutual fund area. we did our job. we ran up our balance sheet
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significantly there. we've now reduced those programs. the market has been restored in those areas. we're done. we closed them down. and i think what you're referring to there is the renormalization, the spread between fed funds and the primary discount rate which we just announced we would normalize and bring the term back on that money over time. in fact, fairly short time. so we went back to more normal operations. we still have an enormous balance sheet. we have a lot of mortgage-backed securities, some extra treasuries on there. and i think that is the issue. and the counterpart to that is $1 trillion in bank reserves that have been built up in the 12 federal reserve banks, private bank reserves. when the velocity picks up, the economy picks up, how will that money go back into the system without creating inflationary pressures? and therein lies the question of when do we raise rates? i expect we're going to have low interest rates for some time. it depends on the pace, however,
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of the economy as to when that dynamic changes. >> so that turnover of money or the monetary base is the issue. that's a question in businesspeople's minds because i hear it. it's going to change discount rates on everything, how you price assets. and so, you know, it is not just the uncertainty of some -- i mean, some of the hinges you talked about are absolutely true. i think we ought to get this health care thing -- i mean, i'm in favor of it, but we've got to get it done. you know, you either say we're going ahead with it or we're not so people can make some long-term plans. >> when i -- i survey, out of 50 businesses i have on my list, ceos around the world, mostly in this country, probably 30 of them before every meeting. and i just listen. i don't impart any of the information. these people are the people that hire people for large and small businesses.
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i don't hear complaints about the cost of money. what i do hear concerns about are these uncertainties you just spoke of. and i think the issue is to get those resolved, one way or another, then businesses can plan around it. but i don't hear complaints about the cost of money. in fact, there's an enormous amount of liquidity. again, over $1 trillion on balance sheets of corporate america on the fortune 500. there's a lot of liquidity. the question is when will it be put to work? answer, when there's greater certainty. >> you talk about the pace of the economy, mr. fisher. people are looking at some of the data of recent days and weeks and saying there's a growing imbalance between the strength of manufacturing and output, largely driven by cars and the government and the consumers' ability or willingness to absorb that output when you look at that confidence and home prices and so forth. >> right. >> that would lead to a double dip down the road if you followed that logic. is that what you're -- are you seeing a taste of that? >> no, i see it and i've said this for a long time. a very gradual -- i use the word
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athemmic or tepid recovery. our people and our businesses have been through a traumatic shock. they were getting pressured by inflation all the way up through the summer of 2008. largely demand inflation or cost push inflation coming from asia and elsewhere. big consumers of commodities. what was coming in the front door was expensive. they were trying to pass it out the backdoor by raising prices. they were meeting resistance. so they cut costs. the biggest cost to businesses is labor. then the gears went into reverse in the financial crisis. they still couldn't grow their top lines, and they definitely couldn't grow their top lines, so they pressured their cost factors even more so they could improve their margins. so they're still running extremely tight businesses. and are going to be reluctant to add to payroll. as far as the consumers are concerned, they've gone through a wrenching change. so it is sort of a posttraumatic shock syndrome we're seeing here. it takes a while to get over that. i think it's going to be a long
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cure. the wound is deep. it will take a long time to stitch it up. we'ring about to have to be very patient. and therein lies the question. can the politicians and can others, central bankers and others, be patient to make sure we don't plant the seed to some future crisis as we try to cure this long-term, painful issue we have in front of us. >> president fisher, president obama's going to be able to name three new members on the fomc. there are some concerns that he will name doves and that they'll keep easy money here for a long time to come. do you worry about that? >> i don't. we have an excellent chairman in ben bernanke. i think he's done a great job in his position as chairman. he's expressing himself very clearly. we have increased our transparency i think on a rational basis. i think we've conducted good monetary policies. he's been very creative. you know, it is a committee. right now we have 17 people on the committee. normally we have 19 people on that committee. there's a good mix in there. and you had president hoenig on
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here, he, myself, lacker. i don't think anybody would call us a dove. a dove, by the way, if you look as a member of the pigeon family. none of us want to be pigeons. >> the last headline i saw was looking for doves in all the wrong places. >> looking for doves in all the wrong places. >> i trust the president, and i know the president from everything i've seen values the independence of the federal reserve under the central bank. and i hope and pray that he continues to treat it that way. >> you got something going on today. you could have come out -- if you would have come out to the studio if you didn't have something going on today, right? >> i'm giving a speech, you're nice to say that, at the council on foreign relations, the organization that all conspiracy theorists love to love here in new york city. but it's a pleasure to be in new york, and i'm going to give a speech in a few minutes. >> next time -- because i think hoenig has guest hosted. you haven't guest hosted since you got this big, new job which some would say you owe us. i'm not saying that's true, but
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it would be great to have you in for an hour. >> why don't you just call him mr. fancy pants? >> you've got people like jon corzine, that's a big deal. >> it is. it is. >> the old has-been stuff, huh? >> he's not there every day, so we'd love to have you in. let's not do two hours. we'd do an hour next time you're in new york. >> i most appreciate it. thanks for having me. >> dallas president richard fisher. handsome man. >> charming. >> yeah, charming. >> charismatic. >> talking about independence day down there in texas. >> i know. >> he went right to it. >> when he said he talked to 50 different corporations in this country and out of it. is texas one of them that's out of this country he's talking about? is that included in the united states at this point? we don't know. we'll see what happens. any comments or questions, drop us an e-mail. our address is when we come back, the stories that will move markets and stocks including costco.
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two key measures still on the way as "squawk" continues on this wednesday. this is not more benefits at greater cost to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit
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welcome back, everyone. we've been keeping an eye on futures this morning. there has not been a lot of volatility. you can see those futures are just below fair value. people are waiting to get an indication of what's to come with that jobs report on friday.
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we'll get a hint of that. meantime, costco reporting a higher quarterly profit, reporting 70 cents a share after one-time items are excluded, 2 cents below expectations. same-store sales were up 9%, better than analysts were anticipating. elliott associates has offered to buy 92% of novell for $5.75 a share. that values the company at $2 billion. shares of novell sharply higher after the bell yesterday and slightly above the price that was offered by elliott. we'll see if we get any more action as well. also, a number of noble economic releases on today's calendar. as we mentioned, the jobs report coming up friday. in less than 15 minutes, challenger, gray & christmas reports on february job cuts. john challenger joins us live for a first on cnbc interview. then again that adp employment report. this is the big number hitting the tape at 8:15 eastern. markets will be watching very closely. forecasters are predicting the economy lost 50,000 private jobs last month. macro economic advisers
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chairman joel bracken will break the news here on "squawk." at 10:00, the nonmanufacturing index plus weekly oil at 10:30. if that's not enough, don't worry, there's more on the list. the fed's beige book at 2:00 eastern this afternoon. still to come this morning, investors eagerly awaiting that february jobs number. you won't have to wait for fresh reads on labor. as becky said, challenger's out in six minutes. at 8:15, adp. both numbers could sway the markets. we'll get numbers and reaction when "squawk" continues. traders at td ameritrade are a demanding bunch.
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but we're also in the showing-kids- new-worlds business.
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and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business. chevron.
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the february jobs report is due out on friday, but here first on cnbc is the latest read on layoffs. john challenger, the ceo of challenger, gray and christmas joins us. good morning to you. >> good morning. >> 42,000 sounds like a bot, but it's pretty good, right? >> no question. these are very low numbers. we've now seen really since mid last summer a series of falling job cuts. these numbers are a big drop from january, 41% down, and a real signal that the economy has started to improve. >> fewest number since june of 2006. and then when you couple the first two months of the year, we're down, what, 73% from the
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pace of the start of '09? >> we are. it was last year, in the middle of the recession, where companies were slashing workers. they were downsizing just to stay afloat. now companies are only making strategic moves when we see job cuts. they're holding on to their workers. in fact, i think they're poised to start adding them. >> what makes you say that? i mean, we know you keep track what they're cutting. and a lot of it in february was due to m&a. what makes you think they're suddenly going to start reversing course and adding to the rolls? >> it feels to me like you can only see these kinds of low numbers for this long a period of time to a point where companies have to start adding them. they're very thinly staffed. they're not cutting any. they're holding on, it seems, if not for dear life, they're really holding on to their workers. that means that any surge in orders is going to cause them to have to bring on new people. if it was a couple of months, i might say we could see the
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economy turn back. but right now it's feeling more and more positive to me. >> john, there's a lot of belief that the snow throws off all kinds of jobs figures from the government, from adp. but you gather your information a little differently. you look at headlines of companies that are announcing layoffs. so does that mean you're immune from the snow factor? >> certainly would seem to be. you know, you're going to cut workers if you have to cut them. the snow is not going to affect your ability to slow down those downsizing. so these really do suggest right now that companies are holding on tight to their workers. we're seeing cuts, you know, in areas like telecom, retail, electronics. you know, not areas that are cutting heavily, you know, that we've seen in the past. automotive, in fact, in retail which led the way last year are way down off their highs from last year. so positive signs coming out of this report. >> yeah. interesting to look at the table. job cuts by industry, you look
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way at the bottom. construction, 55 layoffs really illustrates how there are no jobs left to cut in some of these businesses. >> well, i think certainly that's an indication of they've bottomed -- you know, there just are not many houses being built, not much construction going on. there's no workers to cut. that's an industry that i think is bumping along the bottom. some of these others like automotive where the cuts are down from 70,000 this year for the first two months down to just 7,000, that's another story. really a signal, i think, that those auto companies are preparing for better numbers this year. they're going to need more workers. they're not going to be cutting who they already have. >> we'll see what this portends for friday, and we'll get adp in a little bit. john, always good to talk to you. thanks for the time. >> thank you. pharmaceuticals report. mike huckman has breaking news on an experimental alzheimer's drug involving dow component pfizer and a partner. good morning, mike. >> good morning, joe. the stock of that partner, the company is called medivation.
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the ticker is mdvn, hit a new high yesterday. but unfortunately investors' hopes and the hopes of alzheimer's patients, their loved ones, care givers are going to be dashed with this news because the drug did not work. pfizer and medivation say this phase three late-stage study did not meet its secondary goals. pfizer says at the appropriate time it's going to determine the next steps for this program. this is a former russian antihistamine that medivation and pfizer were trying to repurpose as a drug to treat alzheimer's patients. they say it did not meet its goals and, in fact, neither the group that was on the drug or on the placebo, they say, was significantly changed from baseline at the start of the study and by one measurement, the people on placebo actually scored slightly better than those who were on the drug.
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and you guys were just talking about health care expenses. this is about a $150 billion a year problem for this country. and it's only going to get worse. now attention turns not just for patients and doctors but mostly for investors as well to a drug called bapanuzimab that pfizer is also in late-stage development with johnson & johnson. this is a major disappointment. >> there's exciting things going on in alzheimer's research. an antihistamine, were there high hopes for this? >> there were very high hopes for this drug. even though it sounds very counterintuitive, and you probably understand -- >> they had it and tested it for this and maybe it works, but there are rational ways to approach this, the causes -- what they think causes alzheimer's. >> but it's such a mysterious disease and there's a debate over what causes it. >> did it seem to anecdotally
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work? >> there were reports that people who actually had alzheimer's and also had allergies saw -- reported that they had better memory. >> was it halted? how long has it been? >> there's doing an 8:30 a.m. eastern time conference call. i suspect it's going to be halted, until that's over, i wouldn't imagine it's going to go past the opening bell and the stock is going to take a major dive. >> $40. how much is dependent on this one compound? >> they also have a prostate cancer treatment that i think is a mid to late-stage development right now. but the options were pricing in a $16 up move. because there had been a lot of anticipation of these data coming out in this time frame. >> up $7.50. >> didn't they just have another announcement a week ago? >> yes. >> that they discovered a drug? >> not that they discovered a drug, but i think you might be speaking of that pfizer, with this drug that i mentioned, there was a separate study that basically determined you can use an imaging agent that you guys
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was provided by general electric, by the way, and abbott labs, a similar one, that's injected or infused into the body. then you go through a p.e.t. scan, and they were able to see the plaque in the brain that before then you could only see during an autopsy. so that was a major step. >> pfizer is indicated down maybe 1% or so. it was a $17.60 close to $17.36. >> the key for pfizer is this other alzheimer's drug. call it bap. >> that could be a song. so it's monoclonal. humanized monoclonal. thank you. >> impressive. >> mike, thanks a lot. >> farmers market on our blog. >> also follow him on twitter. >> mhuckman and carlquintanilla. >> you didn't know he made a move. >> i started tweeting. and you're next, my friend. >> you didn't tell me. you left that out. >> you're a twit if you tweet.
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>> you used that joke so many times, i should have fallen for a response. it comes home, doesn't it? >> so you're twittering, tweeting. >> you going to follow me? >> no. i'm here. i follow you way too much already. i know how you feel. >> good. i'm going to start tweeting about you. in the meantime, greece green-lighting more spending cuts in an attempt to try and lift itself out of a major financial crisis. its european neighbors like spain, they're watching the situation very closely. and that's where we find our steve sedgwick this morning. steve, reaction to all these new cuts by greece. what are you finding? >> reporter: i think it's fascinating and, of course, the spaniards don't want to see a domino effect and neither do the uk or the americans for that matter as well because greece's problem today could be spain's and the u.s.'s and europes broadly tomorrow. look at the figures. spain is big. it's the fourth largest economy in euro. $1.6 trillion economy with $4.9 trillion worth of private and public debt concerns in total,
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and issues in this country, they have 19% unemployment rate and 43% unemployment for 16 to 24-year-olds. they've also got a housing boom which has burst but it hasn't burse as much as, say, u.s. housing did previously because they're not taking their losses. valuations in housing have only fallen 15% which is half what they had in the u.s. that's despite the fact there's about 1.3 million unsold homes out there. they're just not making tough decisions despite the fact that the government has come up with a $50 billion euro austerity plan. the question is will they come through because this is a country still in recession. last year they contracted 3.6%. they're expected to contract again this year and bringing in austerity in that environment is very tough. let me give you an example. workers, if they are sacked, get 45 days' severance payment for every year they've worked. if you work ten years, you get 450 days' severance.
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that is why they're not sacking the long-term employed. that is one of the big problems in this economy. back to you guys. >> all right. thank you, steve sedgwick. you need more followers, man. you just started to tweet. >> i just started this week. it's a long process. >> twins. how old are they? >> 8 months. >> every poopy diaper i want to hear about. remember, gwyneth paltrow, if she has a b.m., you know everything going on with her full colonics. can we get that from you? i want to know. >> it's more business centric. >> please follow carl. you're under welch has millions, right? >> someone asked me, you're only allowed 140 characters which is more than enough to right "joe is a tool." >> and you know what a tool is now. >> it's a good thing? >> no, it's a -- never mind. coming up, we'll talk to the co-ceos of s.a.p. in an interview you can only see here on "squawk."
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if you go to -- this is a cnbc exclusive. so you need to go to twitter. and then if you just search one word, carl quintanilla -- >> since you've said it, i can't tell you the number of followers that have just now joined.
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>> becky -- >> i don't know how to join, but i'm following him. >> you go to twitter -- >> how many people just joined? >> 50. >> yes! now i'm liking this. i can say it here and it comes out there. >> people are listening to you which is terrifying. >> moving on up. >> the cnbc exclusive was not twitter, although i think it's pretty cool, but join, please. we're going to talk s.a.p. after a leadership shake-up, s.a.p. is getting back on track, inking a new software deal with 3m i think at oracle's expense and delivering the opening bell. joining us in an exclusive the new co-ceos, our old friend bill mcdermott who is a guy we had in studio a lot. and jim hagaman, it is snave or snave? >> snave.
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>> good. at least i checked. which of you gentlemen, i don't care who addresses it, but in the short time mr. apothaker was on the job that both employees and customers were chafing, and you got brought in to make sure that doesn't happen. bill, why don't you start. describe what the situation was and how you're going to fix it. >> well, thanks very much for the warm welcome, joe. good to be with all of you again. i'm glad you're having fun because jim and i are having fun, too. we have a good strategy at s.a.p. and have had a good strategy. what jim and i want to do is focus on the execution of that strategy. that is far more important than having a good strategy. it's what you do with it. so as you rightfully point out, we're here to motivate our people. we have 48,500 of them that are fired up and want to do great things for our customers. right now it's about bringing solutions to market, innovating for our customers, and delivering good results for our shareholders. >> jim, from what i can
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understand, and, you know, obviously, just getting more interested in what happened at s.a.p. this morning, but mr. apothaker wanted to boost profits and margins. there were price increases that were not taken well and i guess the service side of things by some of your customers. are you freezing those? rolling them back? how are you going to improve profitability if you don't do that, if you reverse some of these moves? >> so actually, profitability in our business is very much centered around the capability to innovate and deliver value to our customers. and we believe we have a good chance of accelerating the transformation of s.a.p. we want to bring some new products out that give us also new markets. we want to go very strongly into the on-demand business where we have not been playing to a big -- as a big player so far. we want to bring out mobile solutions which makes our software more relevant for more people. and we believe that can drive
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the top line that you need. at the same time, we are focusing very much on being efficient. we're putting new methods in place on how to build software like an entrepreneur to get the speed of an entrepreneur. and with that, we believe we can with a current r&d investment and get the necessary profitability. >> joe, on the customer support, the customers wanted choice. they didn't want just one support offering. they wanted choice between two. so one of the changes we made immediately is to provide them a choice between standard support and enterprise support which is the more elegant, complete software support offering. so we responded to that issue. and it's been addressed. so going in the right direction all the way. >> do you get the feeling that you have enough time to execute your strategy? s.a.p. in the past has been the possibility that it could be sold at some point and that the founder and big shareholder, he must have had, obviously, something to do with the management shake-up.
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do you feel like you have enough time to execute your strategy, bill? >> well, first of all, the good news is we have a great brand. and when you think about the assets of s.a.p., you have 95,000 customers. and you go to market in 25 industries in all markets, and it's totally global, the company. the strategy is very sound. as jim said, we're going to provide on-premise, on-demand and on-device solutions for customers and we orchestrate between those technology levels like no other company in the world. our business plan is rock solid. right now we're looking at the economy. it can't get much more difficult than it was last year with an improvement there and leverage on the top line, with jim keeping the innovation costs in check, you get the force multiplier on the bottom line in the margin expansion. so our mantra right now is we're going to be even more focused on innovation, growth and margin. and yes, joe, i firmly believe
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that we will get this job done, and we have it within our control to do so. >> and i don't know, you guys vacation together with your families? are you friends? you're the co-ceos. some people think that's problematic right from the start. are you looking over your shoulder? is bill looking at you? how do you guys get along? you've been working together for a while. >> yeah, we have. and that makes it much easier, you know. we have a relationship over many years. we have very complimentary skills. we have a fundamental trust in each other. and i actually believe that this gives this company 200% commitment to the job that needs to get done. and we are definitely committed, both of us, to make it happen. >> absolutely. in fact, today, joe, we're with 50 of the top ceos from around the world. jim and i are hosting the meeting in frankfurt. and we're talking about innovation, globalization and growth and how our business offer plays a role in creating the new, more integrated
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corporation. so we're excited. 100 cios yesterday and we kicked off c-bit which has 350,000 tech professionals in one form or another in attendance. and both jim and i spent some time with chancellor merkel. she said it's time for businesses to innovate, compete and invest. and we want to take full advantage of that. so jim and i, it's built on high trust, and nothing comes between that. so we're having fun. we're excited and ready to go. >> the only problem is that bill sees me more than he sees his wife. >> that's true. but i say hi to her. >> you'd better. we look forward to seeing either of you gentlemen when you're back in the states, come in and say hi, and we appreciate your time this morning. thank you. >> thank you very much. great to see you all again. >> good to see you. we havou know, co-anchors. you know, i'm watching you. well, this twittering thing
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comes to mind. >> leapfrogging. >> exactly, leapfrogging, trying to get ahead. so you're the anchor that twitters now, basically. >> you guys are welcome to join. >> believe me, i'm looking into it immediately. >> i think you'd get a lot of followers. >> we have three. we're constant -- you know, beyond carl has a lean and hungry look, always, you do. coming up, jobs are taking center stage in both washington and on wall street. today's adp report is ahead at 8:15 eastern time. we've got the numbers and the instant reaction still to come this morning on "squawk." stick around.
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there's a look at futures on this wednesday morning. just got challenger layoffs for february. looked pretty good. the lowest numbers since, oh, boy. they're looking at the deck there. >> that's what i'm worried about. it's so hard to fit -- >> okay, we get it. >> you could follow carl quint so much easier. look how it's spelled, two "ls." >> let's say there weren't too many other carl quintanillas. it was not taken. >> you got it right away? >> it's all mine. so we got challenger numbers. >> tweet right now. >> i'm going to. what do you want me to say? ghost tweet? >> yeah. >> really? >> can i do it? >> no, you'd better watch out what he'll say about people and hand it off on you. don't let him on your account. >> we'll negotiate during the break. still adp on the way. the pregame before friday's pick kickoff. the numbers at 8:15 eastern
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time. and then former utah governor and former health and human services secretary michael leavitt, former vermont governor howard dean. >> somebody already took my name. i'm trying to set up becky quick is already taken. >> we'll be right back.
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the countdown to the main event. >> who did you expect? >> i was hoping he wouldn't show. >> the jobs report is this friday, but today the adp employment figures will get the markets warmed up. we'll get the numbers at 8:15 eastern time. >> is that all you got? is that all you got? >> bringing health care back to life. >> i got ants in my pants. i'm discombobulated. >> an ex-health and human services secretary michael leavitt and former vermont governor and medical doctor howard dean bring the debate to "squawk box." >> doctor. >> doctor. >> doctor. >> doctor. >> doctor. >> doctor.
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>> doctor. >> and find out where market gurus go for guidance. >> you seek yoda. >> you know him. >> get ready for the jump to light speed. "squawk box" begins right now. >> jerry lewis on the telethon. 0íjh
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former new jersey governor jon corzine who just joined on twitter. also from goldman sachs. much more to talk to him about. first, as you see from our countdown clock, we're getting closer to the adp report that will be out at 8:15 a.m. eastern. for those of you that do need hundredths of a second, if you're planning your day around the adp report, you need to know -- >> did you see the chilean earthquake may have shortened the millionth day? >> we could be a little off. >> we don't want to break the embargo. the futures have been around the flat line. you wonder, the adp report will give us an idea on friday.
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we'll get positions based on what comes out on friday. i started talking about this a week ago monday. >> you did. you were first. you were early. >> never too soon. what's going on? >> i have six followers. i just created this five minutes ago. you're not twittering, though. >> no, i'm just following right now. >> what's the page? what's your handle? >> beckyquickcnbc. >> perfect. i may have to. >> you're going to get left behind. >> you'll do it by the end of the show. i'll sign you up. >> mac's going to start tweeting. >> another way for people to write in and ask me if i have a toupee. i'm not going to do it. >> maybe the truth will finally come out. maybe you could do a carly simon "you're so vain" kind of thing. let's check out today's top stories. pfizer and partner medivation releasing disappointing results on their alzheimer's drug this morning. shares of pfizer lower. shares of medivation are sharply lower. they had been frozen. as you can see, that's been released, and that is affecting that stock greatly.
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it looks like the last trade on that is $11.48. so that's a huge drop, down about 71% from where it closed yesterday. very disappointing results as mike huckman told us. we'll see what's to come with this story. meantime, reuters is reporting that aig may follow citigroup's lead in an attempt to try and exit the u.s. government's holding in the company. a source says aig may convert existing treasury preferred shares to common stock, allowing them to be sold in the market over time. also, greece making cuts to get the country out of a major financial crisis. the greek cabinet has agreed to slash civil service salaries and entitlements. also raising greece sales tax. that, as you might expect, is leading to some protests. and cnbc's guy johnson is in the center of all this. he joins us from athens. and guy, what's the reaction in greece to all of these cuts and this news? >> reporter: becky, i have to say that most of the news we've had out today had been well telegraphed. the package which, remember, is
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only the latest in a long line of packages that have been unveiled this year pretty much exactly as the media had, billions will be shaved off in order to try and reduce the country's deficit. we have seen more demonstrations in athens today. the civil service striking once again. we've also seen pensioners striking. i'm not sure quite how that works, but they've been here demonstrating outside the prime minister's office. that ended up delaying proceedings a little bit earlier on. we have seen signs a little bit up on the german bund. the message is partly domestic and partly international because the government is sending a clear message, we've done our bit, you help us out. last night he said that if greece can't borrow at similar rates, that would be catastrophic. this morning in cabinet he talked about the idea greece could go to the imf. that would be a big blow to the credibility of the euro zone. and today he made it very clear
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as part of the statement, we've done our bit. now you need to help us. that is a message being directed toward angela merkel who he'll be meeting friday. another busy morning and it's building up to a busy end to the week when that meeting takes place. and we may see help being a little more forthcoming for greece. guys? >> thank you very much, guy. keep a close eye on what's happening in greece. meantime, the president will deliver an address on health care reformulator on today. yesterday he released this letter to congressional leadership announcing he will explore four areas of republican concerns. joining us this morning, former utah governor and health and human services secretary michael leavitt and former vermont governor and dnc chair howard dean. our guest host, of course, former new jersey governor jon corzine. man, got a bunch of former governors. good to see all of you. governor dean, let me start with you. looks like he is not going to, according to politico this morning, at least, not going to use the word "reconciliation," but he is going to call for this up or down vote as he has been.
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according to politico, wants to do this in two weeks. although he won't mention a date. they think that's possible. is it? >> it probably is. the majority controls the pace of legislation, especially in a bill like this. this bill -- this method of getting a simple majority to vote has been used 23 times in the last few administrations. five times during the bush administration. so it's not unusual. i think the majority of american people have no idea what the reconciliation process is. so why not call it a simple majority up and down vote which i think is what the president's doing. >> we all know that's not historically how the senate is supposed to work. it's built on the idea that sometimes the majority can be wrong. do you not expect any blowback at all? >> no. the republicans will yell and scream. but because it was used five times during george w. bush's administration, it's been used 23 times in the last few administrations. so this is the kind of thing that causes a big kerfuffle inside washington, but in two weeks, people will look at the bill and see if they like the
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bill. they won't care how it got passed. >> we'll find out the answer to that. governor leavitt, ever since the televised summit last week, they appear to be foaming the runways for this type of legislative tactic. >> it does seem to be their course. and i agree with howard. i'm not sure how long people will hold on to the process issue, what they're going to seize on is they don't like the bill. they haven't -- they've expressed that. the public's expressed that resoundingly and repeatedly. and they're moving forward. it appears to me that they are moving it towards some action. we'll likely see a quite robust referendum on whether we have the national government this involved in our health insurance or not in the 2010 election. >> does this letter that he sent to congressional leaders trying to incorporate some republican ideas, does that impress you at all? whether it's substantive, whether it's good will based?
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does that mean anything for people who might be on the fence? >> well, the items that he offered are so inconsequential, really, in the context of 4,000 pages between the two bills, that they really are on their face just something to be able to say i'd really like to do something bipartisan and like to have the label of bipartisanship on this. but they've made a decision, it appears, that they're going to move forward if they can get the votes. washington works that way. i mane, it's bone-on-bone power. if you've got the votes, they'll move forward. the only thing that can stop that is for the american people, basically, to express their disdain and to begin to agitate that they're not going to like this and that they're going to punish people who support it. and if that's the case, then those who vote for it will have to go home and face the public. >> governor, you've been -- >> first of all, reconciliation is something that 99.9% of the american people don't have a clue about.
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and i agree with governor dean that if you talk about a majority rules, i think people are a lot more frustrated with filibusters where you've got to get 60 votes to get something done than they are with 51% of the vote on those situations. you know, i believe that we, as we were talking earlier, need to get to a conclusion about this whole debate on up or down -- >> yes or no? >> -- and move forward so that people can make the judgments that they need to make in an economic context, and we certainly have to do it in a context of trying to control these costs. and i think that governor dean and i probably differ with governor leavitt in the sense that if you don't get people insured, you're not going to have control of the costs. actually expansion of coverage is the way that you get control of costs. that's the biggest factor. people go into the emergency room.
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they go in as the high cost point of entry in the system, and those costs then get reverberated back into health care costs for everybody else. >> governor dean, we had this discussion with warren buffett earlier in the week. he, if he had his druthers, would go back and address costs, as he put it. we asked him if expanding coverage is part of that formula, but he seemed resistant to that. why do you insist that covering more people results in lower costs? why not go the other way? >> governor corzine's right. you have to include everybody in the picture. one of the problems that we have with medical costs is it's like squeezing a balloon. it pops out someplace else. look, this has been tried since harry truman, including by republican president richard nixon tried to get something done, and it can't be done unless everybody's in the system. you cannot control costs. there's no rational system of health care that we have in this country. and you've got to have a rational system with everybody in. even -- look, this obama bill, the closest thing to the obama bill that's passed or the senate
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bill has passed is mitt romney's bill. >> where premiums are up. >> yeah, premiums are up, but everybody's in the system and they're now finally moving towards things to control costs. you can't control costs unless everybody's in. >> governor, all these guys that have talking points, let's start over, all the republicans, you're the ones that started that. you were the first one on here that said you didn't like this bill. we should start over. did you know you were -- you, like, set off a tea party movement. now you like it. but you're the first one to say start over. now where are you? flip-flopper. >> interestingly, joe, the tea party movement extends to the center-left as well. scott brown wouldn't be president if it weren't for obama -- i mean wouldn't be -- ha ha -- maybe he will be -- >> you remember saying it's a bad bill, we should start over. >> i don't like the senate bill. i haven't made any bones about that because they don't include much cost control and they don't really eliminate the preexisting conditions problem. >> you're a great american. you're a great american, governor. i remember you said that. now you're saying it again. >> thank you. >> you're welcome. but now you're supporting it.
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>> no, i think the house is going to add some things. look, all i want is to allow them to have people buy into medicare who are under 65. it's really smart politically, and it's really smart in terms of rationalizing the system. medicare costs don't go up nearly at the same rate as costs in the private sector. the reason is because you have everybody in the same system, and you can make some rational decisions about how to pay for it. >> i wish we had more time. adp's on the way. thank you. we're back after a couple. >> we'll wait and see what adp says. this is not more benefits at greater cost to your company insurance. this is not how does it fit in my company's budget insurance. this is help protect and care for your employees at no cost to your company insurance. with aflac, your employees pay only for the coverage they want or need. and, the cost to you - nothing at all. if all you know about us is... aflac! ...then you don't know quack. to find out why more businesses provide aflac, visit
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let's get to steve liesman. he's got the numbers for that adp report. steve, go ahead and take it away. >> thanks, becky. a mixed adp report sees employment declining by 20,000 in the month of february. this is for private sector employment. and they revised downward the january report to 60,000 from 22,000. the nonfarm payroll estimate among economists for both government and business and private sector for february is for $75,000. let's bring in joel practicalki. this was the month where you were going to tell us this number is positive. it's mixed but it's not
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positive, joel. >> it's not but i could return triumphant next month. >> you think so? let's look at some of the details here. small business and large business both down 18,000 and 10,000 respectively with medium business down 8,000. what's going on in the labor force right now that's kind of showing some of these categories at least are positive? >> the way i look at this one, steve, is as follows. we now have jobs expanding in the service sector. that's shown in today's report. we also have jobs expanding in the manufacturing sector. that's shown in today's report. were it not for another sizeable decline in employment construction, this would have been a positive number. >> is that weather related? >> in the adp data, it is not. unlike the bls numbers which will be affected heavily by the snowstorms we had in the east coast, the collection of the adp data is not so effective. >> i'm tempted to ask you why, but i don't want to have an econometric discussion. >> i can give you the answer. it's quite simple.
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in the bls data, a job is lost if a snowstorm prevents a person from reporting to work during the reference week. in the adp data, as long as that name remains on the computerized list of employees, he remains employed. >> i see. so he's not fired, he's just not -- >> just not there for that week. >> right. joel, the data's been kind of lame lately, i guess is the best way to put it. jobless claims have surged up, consumer confidence has plunged. do you think we're headed for a double dip and the recovery is in jeopardy here? >> you're right, there is a pause in economic growth following the 6% growth in gdp in the fourth quarter that was driven importantly by fiscal stimulus and inventory building. and now we're taking natural consolidation from that. in addition, there are paybacks that are related to the expiration of the housing credit, to the expiration of the bonus expensing for equipment that was part of the stimulus bill a few years ago.
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and in addition, there probably is some sort of payback from very strange weather patterns that we had both in the fourth quarter and the first quarter of this year. >> joel, there are some people who say the reason why there's not hiring especially at the small business level is political uncertainty. i know you don't love to get involved in politics, but how much does that play a role, you think, in whether or not the small business is hiring? >> i think that could be a role. there's a lot of uncertainty about, in particular, health care legislation and what costs that might impose directly on businesses, particularly small businesses. and until some of that cloud of uncertainty lifts, i think it might be natural for a small business owner to just wait and see how the dust settles before taking the plunge of expanding their labor force in an economy that's still growing only modestly. >> joel, one more thing. i've been confused by the manufacturing data. we've had good numbers when it comes to the ism, even some of the production data from the fed has been positive, but you really can't seem to get over the top in manufacturing employment. do you think that's still to
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come, or are those jobs not coming back and it's all going to be productivity? >> well, one thing to remember about manufacturing employment is that it is following a long secular decline anyway. so robust growth in manufacturing employment relative to that trend isn't 50,000 or 75,000 or 100,000 a month. it's barely positive. and we have that, in fact, in today's report. >> becky? >> you know, i do think that today's numbers are broadly consistent with what we've seen in the ism numbers. >> steve, joel, stay right there. let's bring in former labor department economist bill rogers, now a professor at rutgers university. and bill, the numbers not positive, but maybe better than what we've seen to this point. it could be an inflection point where we change next month. what does this all add up to from your perspective? >> number one, we're clearly better off than we were basically last year at this time. last year at this time we were averaging close to 700,000 jobs being lost per month. now we're down into sort of the 10,000 to 15,000 to 20,000
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range. what's encouraging is you're starting to see the growth in the services sector. it's encouraging to see the manufacturing growth. but i tend to agree with joel that we're sort of in that stage that this is, as you said, an inflection point or also the economy taking a pause, particularly i would also agree that there is a great deal of policy uncertainty whether it be on main street or wall street, if you want to dicotomize is that way. >> hey, joel, you talked about how this is different from what we'll see with that jobs number on friday or at least in the weekly jobless claims because of the snow numbers. but does that mean the numbers we'll get on friday could very likely be a lot worse than what adp is showing us? >> we put out a series of reports last week and early this week in which we estimated that if the adverse effects of the february storms are comparable to the adverse effects of the blizzards that we had in 1996,
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in january of 1996, that the bls report could be suppressed by anywhere between 150,000 and 220,000 jobs. so i am looking for the bls number to be notably weaker than the adp number. and i think you do see that reflected in the consensus expectations of the friday number which are below the adp number even though the bls number will be boosted by the temporary hiring of census workers. >> traders are going to be watching this very, very closely, trying to figure out what to make of it. but joel, you would not necessarily bat an eye if the number's quite a bit worse than expected, you'd be able to write it off to that? >> yeah, because the very next month it would be stronger than -- well, it would be stronger than the baseline by exactly the same amount as the workers who were prevented from reporting to their jobs in the reference week for february, in fact, showed up during the reference week in march. >> we've had this happen before where you'll get a bounceback the following month. but the other thing -- >> a great period is to look at the january, february of 1996
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which was an epic storm that had a big impact, negative first and positive the following month. >> joel, not to put you on the spot, but last month you mentioned you all were going to do -- had your annual revision revision. and i know last month bls reported their annual revision which i think also affected consumer confidence where they said actually over the last year, we had lost up to around 800,000 jobs. and so when you did your annual revision, what kind of results did you find in terms of -- >> well, our annual revision does three things. new seasonal factors. it also advances the reference month from march of '08 to march of '09. and we also update underlying regressions that can down our numbers. our revisions were not as large as bls's in a downward direction because our data in realtime was coming in weaker than the bls numbers anyway. so the fact that we lined up on the bls numbers for march of '09
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actually amounted to a much smaller adjustment in our numbers than the bls had to report the previous month. >> governor corzine, you mentioned that you've spoken to a lot of business leaders s tsy and see where things are shaping up. does your view match up with what we've heard from challenger and adp? >> sure. and i think the one thing i'd underscore in this conversation is there's something besides cyclical going on. whole manufacturing numbers. those jobs aren't coming back. there's a lot of outsourcing going on in legal work, in technology work that i don't think those jobs are ever coming back. i've run into companies that are doing significant amount of their back office work in india now, dramatically different than when i left the private sector ten years ago. and it's growing. whether it's reading x-rays and other issues. there is a lot happening that i
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think is changing the underlying, underpinnings of what will drive job growth. globalization is a big secular factor that overlays what's happening. >> and i was reading yesterday, the exhaustion rate on people who don't -- haven't found work by the time their jobless claims -- or their jobless benefits run out is 54%, something like that, right? >> it's quite high. and, again, that's why you're seeing continued pressure for us to extend unemployment insurance benefits and benefits through the year partly because we're not seeing the job creation. at the beginning of this recession, we were having 2 million more openings where we are today. i mean, layoffs have begun to sort of mediate, but for the large part it's about job creation. to me it's what's going to be that next catalyst to grow the economy and then also when are households going to get back to that point where -- they may not be consuming like they were at the end of the '90s but a much stronger level of consumption.
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but the governor is correct, though. it's not in the outsourcing. it's not even necessarily just manufacturing. we're seeing it in broad services. but some of the good news i was talking to at the thought leadership institute a couple days ago to a vaerlt riety of h resource managers, and their hiring patterns or expectations for this year are up. now, is it going to be in that level that's going to be in the 130,000 to 150,000 the annual sort of monthly labor force growth? probably not. but again, we're edging forward, moving forward, as i was talking about in the past times, the two-step economy. now we're two steps forward, one step back, and we're moving forward. >> essentially moving forward. bill, thank you very much. great to see you. joel, thank you and steve thanks for wrapping that up for us. >> pleasure. coming up, keeping up with the value strategy. plus the road to recovery starting in washington. congressman jeb hensarling. he'll join us in the next half
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hour. "squawk box" is coming right back. (announcer) we're in the energy business. but we're also in the showing-kids- new-worlds business. and the startup-capital- for-barbers business. and the this-won't- hurt-a-bit business. because we don't just work here. we live here. these are our families. and our neighbors. and by changing lives we're in more than the energy business we're in the human energy business.
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when we come back, a value strategy session with thomas russo, the widely followed investor keeps a big chunk of warren buffett's virtue in his funds. we'll talk about buffett, talk the dollar and uncertificate ai
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some of the top stories this morning, ahead of friday's jobs numbers, adp says private sector jobs fell by 20,000 last month, a smaller drop than economists were expecting. january's losses revised to show a drop from 60,000 from the original 22,000 reported. greek officials have approved a new austerity plan designed to save $6.5 billion, equivalent to 2% of gdp over there. the prime minister says the measures are stringent enough to warrant full support from the company's european union neighbors although they're not ruling out help from the imf. medivaiton releasing disappointing news. >> consolidating at lower levels, building a base. >> 70% above. >> presenting a great buying opportunity. it's down 80%, isn't it? >> our pharmaceuticals reporter mike huckmann was here before
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the news. you told us it was going to be rough. >> an understatement to say the least. the conference call is getting started now. i can't understand what they'd try to say to inmize the damage already inflicted. after being halted when the news broke about an hour ago, it's getting hammered. premarket down 68%. jpmorgan biotech analyst jeff meacham says when you add up the company's cash, he gets a valuation in the mid-teens. obviously right on target. the stock has banked the company and wants to do it again. the stock hit a new high yesterday as investors had high hopes for this drug which they had been expecting to see key data on in early march. shares of dow component pfizer meantime are also called lower ahead of the open. the company bought into this drug a couple years ago for nearly $425,000. it was set to get 60% of profits if it worked. they'll now determine what it calls appropriate next step.
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for pfizer, though, all hope is not lost in alzheimer's. it got a bunch of experimental drugs for it in the acquisition of wyeth, the biggest one called bap which it shares with johnson & johnson and elan. the one for medivation was an old russian antihistamine. it was renamed, but this key late-stage study showed it was no different than a sugar pill. by one measurement, the patients on placebo actually scored slightly higher than those who got the actual drug. coming up on "squawk on the street," an exclusive interview with ceo dr. david hung between 10:30 and 11:00 eastern. for more, check out the blog, follow me on twitter @mhuckman. going to jump back on the blog. >> or carl quintanilla. >> or becky quick. >> you're already on. i just looked you up.
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you already have a page. >> they could be saying anything, right? >> and anybody would believe him. >> probably would be less than what i'd say. >> exactly. markets today, as we've been watching the futures bounce around in a pretty narrow range. we've got the greek austerity package, the third one in three months and the adp numbers not too encouraging but hasn't done a lot to move things around. want to see how things are trading in chicago. reacting to adp. rick santelli is there. rick, i wonder if you think anybody's going to make any bets before friday. >> reporter: you know, most traders don't call them bets. they call it trying to earn a living, and i think they're going to do that prior to friday leading up to friday, yes. but i also think many times right before the number at 8:30 eastern, you see moves. many people think, ah, somebody has the number. but what it seems to be many times is traders lose that nerve. they'll play before the number but right in front of it it flattens out. it's a dicey call with all the global snowing making the number
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a little more complicated. >> you convinced -- do we think that greece fire so to speak is on its way out? >> reporter: well, you know, how could i phrase this? i think greek austerity due to the greek economy what paygo does to our deficit. we talk about these things in brooes, but it seems like this is the third time around. and based on the strike from the general popularity flavor, i think austerity is just like paygo. you put it on parm, then you go away, and you ignore it. i think it's going to be the same thing. you know, you look at the euro currency which has been rather resilient. and i ask the following question. is the euro going up because there really isn't going to be a bailout, or is the euro going up because there is? and believe me, it sounds like something that should be easy to answer. but there's plenty of debate on both sides. >> you've got that right. we'll keep a close eye. rick, thank you. good to see you this morning. rick santelli. we've got another shout-out at "the times" over the weekend.
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>> he's going to be -- i mean, whenever you bring it up, it's going to have something to do -- what did you say, becky, they said another commentator had instigated? >> yep. >> that's me. i'm a commentator. i'm a generic, non-tweeting -- >> rick wasn't the first person. >> yeah, i'm like the guy that was sort of asking -- i do, i try to get him going all the time. that's me. what is that -- >> stirring the pot. >> yeah. there's an expression. soup spoon. anyway, warren buffett -- cook level, anyway, warren buffett joining us for three hours this week and we got to hear the oracle's take on the faith of the dollar. >> we were long about ten different currencies against the dollar, maybe, i don't know, three or four years ago. and we closed all those positions. but the best thing to own, you know, the best thing to have is your own talent. they can't take that away from you. the best thing to own is a good business. a good business, you know, whether it's frito-lay or whether it's coca-cola or
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whatever it may be, they will retain their value in real terms, in my judgment, over time no matter what governments do to currency. >> joining me now, thomas russo, partner at gardner, russo & gardner, good morning. good to see you. welcome back. >> thanks. >> tell us about -- let's start -- you do private accounts? is that a mutual fund? what's your firm do? >> it's private family wealth management. we manage money for high net worth families. but it's not a mutual fund. it's a separate account. >> so separate accounts. so we don't know -- you don't have to publish any track record or anything like that? >> well, we have a track record, but we don't have sort of a public vehicle which is sort of ready. >> how much do you think you manage at any given time? >> several million dollars. >> several, fantastic. at this point i was reading, you own berkshire since when? >> 1983. >> 1983. he spoke to your class at
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stanford. >> yes. >> so you own it in your own account, and now it's the largest holding for your ventures that you manage? >> it's nestle. >> some people almost think it's an index fund although its composition has changed. it used to be financials and now it's much more manufacturing. >> it's really a collection of powerful franchises, businesses within it are interesting. ironically, a lot of them skew towards the building cycle. warren mentioned in his annual report. acme bricks. out of peanut butter. >> that's what i want. but he'll send me a regular brick. and it's like the last thing that i really want. >> it will look good on the table. >> i'm definitely going to put it here. where are you with the stock market? are you going to tell me it's a market of stocks, not a stock market? >> unfortunately. >> yeah. >> which is true. >> a market of global stocks. >> a market of global stocks. >> you don't have to limit yourself to this stock market,
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but it is the question of stocks. and then around the world, there's this enormous concern over greece. it was a -- will the fire take away the returns for future investors? in great distances in foreign markets because the euro is going to give back. those concerns are really foremost at the markets right now. >> really? that's what you're focusing on. what other major themes would you tell investors to be aware of in today's market? >> i just -- there's a pullback from the headlines. this morning the news is about the jobs report. whatever our jobs are today, you know, seven months from now, ten years from now, it really won't make a big difference. so make sure you don't react to the current news too forcefully. you know, the jobs report suggests whether or not the u.s. economy is doing well. and then it begs the question compared to what? and that goes back to the world of currencies and the world of european markets. we have in the portfolio that i oversee holdings in western european-based global consumer
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products companies that today are, i think, attractively valued because the world is so worried about western europe. >> really? >> so you have nestle -- >> nestle. >> -- and the world's worried that the euro's going to collapse, and nestle's had an historical dominant position throughout europe, there's the concern that nestle's products are somehow diminished. well, they've taken steps for the first time ever the crisis of the euro, the crisis of western europe, allows businesses to start to operate more efficiently in a part of the world, western europe, where it's really an inefficient place to do business. >> what else has caught your eye you put in your account? >> well, you have a collection of nestle-like businesses, heineken, s.a.b. miller, rieschman which is the owner of carti cartier. >> this is really the focus for you. >> the brands, not the retailers as far as my preference. >> this is the theme you want to
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bring today, and that is western european consumer issues. >> yeah. >> great. and most you can buy here? >> not necessarily. >> find a way to buy them. >> yeah. you buy them overseas. you can buy them through adr. in the case of nestle, there's an adr. >> you can buy them at gardner, russo. >> yeah. the way that the businesses will work over time is the brands that they have, often businesses like a unilever, nestle has been in countries for 100 years. the brands are established and coveted yet they're not yet affordable by the predominant population. that's changing because the world of the weak euro really masks the real story which is the growth of markets that compete more effectively against the european countries. and with that competition comes better consumer disposable income. and with consumer disposable income, people reach for the products they long aspire to which are out of their reach.
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whether it's at coca-cola, whether it's a nestle chocolate bar. >> can we follow you on twitter? >> i don't think so. >> are you following carl yet? >> i've never -- i've never logged in. >> check it out. carlquintanilla, it's one word. thank you. >> okay. >> mr. russo, tom gardner, russo and gardner. >> that's right. thank you very much. >> carl quintanilla, twitter. >> check him out. >> the best pitch man. i love it. >> i mean, this is, like -- >> you're getting hundreds of people coming in. >> yeah. i see you are, too. >> yeah. it works. anyway, coming up, waking the country up from its fiscal nightmare. congressman jeb hensarling has a plan. how the nation can avoid disaster in his opinion next here on cnbc. not that long ago, many families were priced out of an overheated housing market. but the times have changed. get the facts at
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today, the dream of owning a home seems more attainable than ever. nobody sells more real estate than re/max. visit today.
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welcome back, everybody. congressman jeb hensarling will be offering a proposal that would prohibit federal spending from growing faster than the economy. he joins us right now. congressman, thanks for being with us this morning. >> morning, becky. why put out this plan right now? what got you to the point where you were so concerned you thought we needed regulation that would actually attract this? >> well, every day i've been in congress, somebody uses the term "crisis," but i truly believe there is a spending crisis. most of us know the facts. and we've had the federal deficit increase tenfold in just
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the last three years under the president's budget, the debt will double in five years, triple in ten. at the end of his budget, we're paying something along the lines of $800 billion on interest alone. and then the news really gets bad. and that is when my children are my age, government will go from roughly 20% to 40% of our economy. at that point clearly you have a lower standard of living, a lower gdp per capita. we have to do something to force congress into a plan to deal with this. and frankly, if we did, i think it would help job growth today. and i believe chairman bernanke has said roughly the same thing. we want to start a national debate. should there be a limit to the size and scope of the federal government? should that be enshrined in the constitution? or are we simply going to double taxes on the american people, have incredible inflation or continue to go to bended knee to china to beg them to buy our
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debt? we believe that now is the time is right and that the american people know something is amiss. and i think they will be more open to this debate than at any time, and i think it's just critical to ensure that future generations have the same -- have a better standard of living, more freedom and more opportunity than we enjoy today. >> as part of that debate, will you apologize on behalf of the republican party for getting the country in such trouble over the past eight years? >> well, i didn't realize i had been quite that busy. frankly, if you look at my record, there were many times that i posed my president and my leaders in congress. yes, i thought republicans spent too much. but if you look at the 12 years when republicans were in control of congress and you look at the three years the democrats had been in control of congress, you see that our average annual deficits have essentially become their monthly deficits. so in order of magnitude, i would say that we're rank amateurs when it comes to spending. it's most important, and obviously we can talk about the blame game, but the question is, where do we go forward?
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and so far the president has not led. he hasn't put a plan on the table. other members of congress have like paul ryan of wisconsin. i'm an original co-sponsor of his legislation. but the bottom line is we're either looking at massive tax increases, massive inflation, or massive increase in interest rates as we continue to borrow, or we can say, you know what? since world war ii, the federal government has taken approximately 20% of the economy. let's limit it to that. >> congressman, do you believe that we should be having the automatic stabilizers that are kicking in on unemployment, medicaid and other issues that provide the safety net that go up, charge and build up deficits at a time of deep recession, particularly the kind of recession that we've just experienced? >> i think absolutely, that at a time of high unemployment and clearly under the policies of this president and this administration, we still suffer
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almost double-digit unemployment. clearly the social safety net -- >> isn't that going to drive it above 20%? >> please, if i could finish, though, that doesn't mean that you don't find other ways to pay for it, number one. and i think maybe the specific question is about the highs and the lows of the economy in what we call the we call the enabling legislation, for example. i would suggest that we do a five-year trailing average of the economy and under our constitutional amendment in a declaration of war or with a 2/3 majority vote, it can be overridden. so that can happen at such a time. in addition if you want to stimulate the economy there is still monetary policy. there is still the ability to stimulate with tax relief as well. that's the answer to that question. ultimately you've got to decide when we're on a trajectory to lower the standard of living of the next generation what are we going to do about it?
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>> you can be worried about the deficit without putting a hard, 20% factor on that that then creates inflection iblts into how you're going to deal with the situation just like the federal reserve is acting differently during the midst of a huge recession and now has to work its way back to normalization. >> i know. but number one the federal reserve still has the ability under their powers to do what they did but when you say you can still worry, i'm tired of worrying about the deficit. i want to do something about it. in the four terms that i've been in the congress i've tried to fight this. i'm the author of the spending, deficit, debt control act along with paul ryan to try to change the process by which congress budgets. i'm an original coauthor of his road map for america that puts forth a plan that would actually save our entitlements programs,
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guarantee them for future generations, ensure they are sound for future generations. but a constitutional amendment is what forces congress to finally act, not to worry about it but actually do something about it. >> somehow or another in the 1990s we were able in a bipartisan way to readjust spending and taxes in a way that ended up with a balanced budget. when i was a u.s. senator, we were struggling with the idea, at least some people were struggling with the idea that we're going to have to buy back all the debt and wouldn't be able to execute monetary policy because there was such sound, fiscal programs in place. there wasn't a balanced budget amendment. there wasn't a 20%, so i think the will can be generated if people understand that there is a real debt problem separated out from the cyclical issues,
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and so, you know, i think it is very important to have the discussion that you're trying to move forward and particularly on entitlements. but i'm not sure we want to build in those inflection ablts going forward. >> i think it's a national debate that ought to happen. we are on a trajectory and don't take my word for it. look at the congressional budget office, the office of management and budget. but i am the father of an 8-year-old daughter, 6-year-old son, and when they're roughly my age, the size of government is going to double. the economy on a per capita basis declined. at that point my children live in smaller homes. my children drive older cars. they have fewer jobs, shrinking pay checks and ultimately they dream smaller dreams in this country and so to say that, you know, for decades and decades with very few exceptions congress hasn't acted to stem the spending tide and to have confidence and faith that they'll do it one more time, you
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know, frankly, governor, now that i've been here for eight years, you may have more faith and confidence than i do and i believe it is a crisis. former controller general walker who used to head the gao has called it a fiscal cancer. then it deserves a strong remedy. and many of us do, so let the debate begin. i also think at 40% of gdp you have a fundamentally different country. we're on the road to becoming france without the wine and the art. >> and the rich, creamy sauces. don't forget. >> congressman, obviously you've tapped into something that is really pulsing through the veins of the american people. we appreciate you coming on to tell us about it. >> thank you. >> when we come back, the markets, reviving economy, parting shots from our guest host. "squawk" continues in a moment.
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let's turn for some parting shots with our guest host, former new jersey governor jon corzine. i thought that was a good conversation you had with him, very cordial and i mean -- >> it was cordial. >> right. but he's got some points and you've got some points. >> well, first of all, i believe we have to get ahold of our
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deficit. you know, i'm on the same side of that. >> yeah. that may be. >> that's a matter of when you do it just like the fed has to normalize the monetary policy. we can't be running these kinds of deficits when the economy is growing. we got to get the economy growing. there's a difference in how you act today and what you're going to be acting two, three years from now. we're not getting to 40% gdp. >> right. >> but we're almost lucky greece came along. i don't say that, i mean, i don't mean it that way but the dollar has strengthened. we haven't paid the piper yet. >> right. >> for what we're doing yet. >> if we don't address the deficit, we will pay the piper. we'll have a devaluation of the dollar. >> we'll lose power. >> you cannot monetize this kind of debt and think you'll have a strong economy or country ultimately. i think people actually will get that. they did in the 1990s with a much less severe problem.
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they did. >> there were some things happening then that the bubble, the tech bubble, you know, a lot more tax receipts. it -- >> it was a different mix but you had a president that took the heat on raising taxes and modifying spending paths. we're going to have to modify spending paths on entitlement. everybody knows that. >> after his health care proposal fell by the way side he was able to tack to the center and work with the republican congress to do all these great things you're talking about. that doesn't look like it is going to happen this time because our president now probably not tacking to the center any time soon. >> joe, we've dropped the public option. we are moving -- >> that's your concession? >> there is an enormous amount of movement from where this started a year ago to where it is today. >> now people on the left don't even like it anymore at this point. >> that's the point.
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>> rangel is talking right now, u.s. house ways and means chairman charles rangel says he will step aside temporarily as chairman. there have been calls for him to do that. the chairman of the ways and means committee says he'll temporarily step aside. you can see he is talking right now. we'll continue to follow this in the next hour with "squawk on the street." governor, thanks for joining us today. >> thank you for having me. >> this is charlie rangel talking. keep an eye on it. "squawk on the street" starts right now. live from the financial capital of the entire galaxy, this is "squawk on the street." good morning, everybody. i'm mark haines. >> good morning. i'm simon hobbs in for erin burnett. front and center today. the best gdp jobs report for two years. the headline number shows that the private sector lost 20,000 jobs in february. it has to be said the january figure wasn't so good. >> that's


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